[stop-imf] Frontrunner for IMF job faces opposition

Mon, 17 Jan 2000 04:02:51 -0500

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Monday January 17 2000 - Financial Times

Frontrunner for IMF job faces opposition=20

Koch-Weser is the favourite, though only Berlin wants him, reports Ed =
Crooks. But a long struggle for succession could be worse

The race to succeed Michel Camdessus as managing director of the =
International Monetary Fund is a curious contest. Promising contenders =
are being kept out of it, and the current favourite, according to almost =
everyone but his backers, is unfit.

Caio Koch-Weser, a German finance ministry official who has spent 25 =
years with the World Bank, is the frontrunner, but he faces powerful =
opposition. Feelings about him in all the G7 capitals except Berlin =
range from grudging acceptance to hostility.

The issue will be discussed at the Group of Seven industrialised nations =
finance ministers' meeting in Tokyo next weekend, but will not be =
resolved there.

The danger is that the IMF could see a long and damaging struggle for =
succession, as the World Trade Organisation experienced last year.

Governments and analysts argue that the IMF's failure to prevent the =
financial crises in Asia and Russia shows it urgently needs reform, =
which cannot be achieved without strong leadership.

The German government has stepped up a gear in its support for Mr =
Koch-Weser. Chancellor Gerhard Schr=F6der is writing to all 24 of the =
IMF's executive directors. Today in Berlin 40 foreign ambassadors will =
be briefed by Mr Schr=F6der's chief foreign policy adviser.

But on Friday night Larry Summers, US Treasury secretary, dropped heavy =
hints that he would not support the German campaign. The new head of the =
IMF must have "stature, expertise, ability to command global support and =
commitment to a process of ongoing reform", he said.

Mr Summers has said he wants an IMF that is much more focused on crisis =
prevention and resolution, and much less involved in long-term lending =
for development - a role that does not suit Mr Koch-Weser's experience. =
Washington also doubts that Mr Koch-Weser possesses the necessary =
intellect and negotiating skills to handle complex negotiations with =
governments in financial crisis.

The IMF post has traditionally been a European fiefdom, and if Europe =
were to agree on a candidate, the US would find it hard to resist. =
Europe, however, is deeply divided.

The French are now backing Laurent Fabius, former prime minister, as an =
alternative. He is unlikely to win much backing: his premiership was =
overshadowed by a scandal over contaminated blood, and few other =
countries want another French MD, especially not one seen as an =
old-style socialist.

It is a measure of how strongly the French feel about Mr Koch-Weser, =
though, that they would even prefer to see a Briton appointed.

Andrew Crockett, head of the Bank for International Settlements in =
Basle, has a high reputation in London. His problem is that the UK =
government is refusing to back him, partly because it does not want =
another row with a fellow EU member.

Italy has a similar problem with the director of its Treasury, Mario =
Draghi. The Italians are seen as having their share of top jobs since =
Romano Prodi became European Commission president.

Non-European alternatives look even less convincing. Jacob Frenkel, =
former Bank of Israel governor, is admired in the US but would be a =
controversial choice.

It looks as though Stanley Fischer, the first deputy MD, may end up =
running the IMF for some time after Mr Camdessus departs next month. He =
might even get the job.

But having made such a public show of support, it would be hugely =
embarrassing for Mr Schr=F6der to see Caio Koch-Weser fail.

If deals are cut, he could still be successful. The UK might be offered =
a compromise on EU withholding tax. Jean-Claude Trichet, Bank of France =
governor and another IMF possible), could take over at the European =
Central Bank earlier than expected.

But the IMF seems now to be faced with two unappealing alternatives: a =
painful, protracted battle for succession, or accepting by default a =
candidate whom almost nobody really wants

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Monday January 17 2000 &#8211; Financial Times

Frontrunner for IMF job faces opposition 
Koch-Weser is the favourite, though only Berlin wants him, reports Ed =
Crooks.=20
But a long struggle for succession could be worse
The race to succeed Michel Camdessus as managing director of the=20
International Monetary Fund is a curious contest. Promising contenders =
are being=20
kept out of it, and the current favourite, according to almost everyone =
but his=20
backers, is unfit.
Caio Koch-Weser, a German finance ministry official who has spent 25 =
years=20
with the World Bank, is the frontrunner, but he faces powerful =
opposition.=20
Feelings about him in all the G7 capitals except Berlin range from =
grudging=20
acceptance to hostility.
The issue will be discussed at the Group of Seven industrialised =
nations=20
finance ministers' meeting in Tokyo next weekend, but will not be =
resolved=20
there.
The danger is that the IMF could see a long and damaging struggle for =

succession, as the World Trade Organisation experienced last year.
Governments and analysts argue that the IMF's failure to prevent the=20
financial crises in Asia and Russia shows it urgently needs reform, =
which cannot=20
be achieved without strong leadership.
The German government has stepped up a gear in its support for Mr =
Koch-Weser.=20
Chancellor Gerhard Schr=F6der is writing to all 24 of the IMF's =
executive=20
directors. Today in Berlin 40 foreign ambassadors will be briefed by Mr=20
Schr=F6der's chief foreign policy adviser.
But on Friday night Larry Summers, US Treasury secretary, dropped =
heavy hints=20
that he would not support the German campaign. The new head of the IMF =
must have=20
"stature, expertise, ability to command global support and commitment to =
a=20
process of ongoing reform", he said.
Mr Summers has said he wants an IMF that is much more focused on =
crisis=20
prevention and resolution, and much less involved in long-term lending =
for=20
development - a role that does not suit Mr Koch-Weser's experience. =
Washington=20
also doubts that Mr Koch-Weser possesses the necessary intellect and =
negotiating=20
skills to handle complex negotiations with governments in financial =
crisis.
The IMF post has traditionally been a European fiefdom, and if Europe =
were to=20
agree on a candidate, the US would find it hard to resist. Europe, =
however, is=20
deeply divided.
The French are now backing Laurent Fabius, former prime minister, as =
an=20
alternative. He is unlikely to win much backing: his premiership was=20
overshadowed by a scandal over contaminated blood, and few other =
countries want=20
another French MD, especially not one seen as an old-style =
socialist.
It is a measure of how strongly the French feel about Mr Koch-Weser, =
though,=20
that they would even prefer to see a Briton appointed.
Andrew Crockett, head of the Bank for International Settlements in =
Basle, has=20
a high reputation in London. His problem is that the UK government is =
refusing=20
to back him, partly because it does not want another row with a fellow =
EU=20
member.
Italy has a similar problem with the director of its Treasury, Mario =
Draghi.=20
The Italians are seen as having their share of top jobs since Romano =
Prodi=20
became European Commission president.
Non-European alternatives look even less convincing. Jacob Frenkel, =
former=20
Bank of Israel governor, is admired in the US but would be a =
controversial=20
choice.
It looks as though Stanley Fischer, the first deputy MD, may end up =
running=20
the IMF for some time after Mr Camdessus departs next month. He might =
even get=20
the job.
But having made such a public show of support, it would be hugely=20
embarrassing for Mr Schr=F6der to see Caio Koch-Weser fail.
If deals are cut, he could still be successful. The UK might be =
offered a=20
compromise on EU withholding tax. Jean-Claude Trichet, Bank of France =
governor=20
and another IMF possible), could take over at the European Central Bank =
earlier=20
than expected.
But the IMF seems now to be faced with two unappealing alternatives: =
a=20
painful, protracted battle for succession, or accepting by default a =
candidate=20
whom almost nobody really wants

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